SMM Evening Comments (May 6): Nonferrous metals on the SHFE rose across the board, tin surged 2.67%

Published: May 6, 2021 17:16
SHFE nonferrous metals all closed higher on Thursday. Copper increased 1.71%, aluminium jumped 2.65%, zinc added 0.34%, nickel strengthened 2.39%, lead gained 1.61% and tin surged 2.67%.

SHANGHAI, May 6 (SMM) – SHFE nonferrous metals all closed higher on Thursday. Copper increased 1.71%, aluminium jumped 2.65%, zinc added 0.34%, nickel strengthened 2.39%, lead gained 1.61% and tin surged 2.67%.

Social inventories of primary aluminium ingots across eight consumption areas in China, including SHFE warrants, remained unchanged from last Thursday and stood at 1.12 million mt as of May 6. Stocks in Shanghai, Nanhai and Tianjin increased slightly, while stocks in Gongyi decreased slightly on smaller arrivals.

SMM data showed that aluminium billet stocks across the five major consumption areas — Foshan, Wuxi, Huzhou, Changzhou and Nanchang — in China increased 9% or 5,100 mt from a week ago to 139,100 mt as of Thursday May 6.

Copper: The most-traded SHFE 2106 copper contract finished the day 1.71% higher at 73,240 yuan/mt, with open interest losing 2,413 lots to 160,000 lots.

US core PCE inflation hit its highest in 13 months and ISM manufacturing PMI continued to rise rapidly in April. Market sentiment improved amid positive economic data. However, the US dollar index climbed to its highest in two weeks, which weighed on copper prices.

Aluminium: The most-active SHFE 2106 aluminium contract jumped 2.65% to close the day at 19,385 yuan/mt, with open interest rising 7,077 lots to 282,000 lots.

Zinc: The most-liquid SHFE 2106 zinc contract added 0.34% to end the day at 22,015 yuan/mt, with open interest adding 2,464 lots to 87,802 lots. Weaker US dollar and positive economic data including US April private sector employment which registered the largest monthly increase since September 2020 and Chinese manufacturing PMI that stood at 51.1 in April boosted zinc prices. However, high zinc prices continued to depress consumption, and the resumption across domestic zinc mines and inflow of imported zinc concentrate further eased tight supply in the domestic market, which may weigh on zinc prices.

Nickel: The most-traded SHFE 2106 nickel contract gained 2.39% to finish the day at 132,220 yuan/mt, with open interest decreasing 7,001 lots to 129,000 lots.

Lead: The most-active SHFE 2106 lead contract closed the day 1.61% firmer at 15,445 yuan/mt, with open interest adding 3,086 lots to 51,494 lots. Rising SHFE lead prompted smelters to deliver cargoes to social warehouses, while downstream orders were moderate. Whether the contract could steady above the 15,400 mark tonight will be monitored.

Tin: The most-liquid SHFE 2106 tin contract ended the day 2.67% higher at 197,240 yuan/mt, with open interest losing 420 lots to 14,930 lots, and it is expected to remain strong in the short term, with pressure from the 200,000 mark.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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